April 28, 2020
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Representative:

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ES-CON JAPAN Ltd.
Takatoshi Ito, President &Representative Director(TSE 1st Section, code: 8892)
Minoru Nakanishi, Senior
Managing Director+81-3-6230-9308

Notice on Disposal of Treasury Shares Through Third-Party Allotment
ES-CON JAPAN Ltd. (ES-CON JAPAN) announces that it resolved at its board of directors' meeting held
today to dispose treasury shares through third-party allocation (the “Disposal of Treasury Shares”).
Details are as follows.
1. Outline of the Disposal(1)
Date of disposal(2)
Number of shares to bedisposed(3)
Disposal price(4)
Amount of fund to beprocured(5)Disposal method(6)Allottee(7)Other: May 14, 2020
: 330,000 shares (common shares): 628 yen per share: 207,240,000 yen: Disposal through third-part allotment: Japan Trustee Services Bank, Ltd. (trust account)
Japan Trustee Services Bank, Ltd. is scheduled to merge with JTC
Holdings, Ltd. and Trust & Custody Services Bank, Ltd. on July 27,
2020, subject to the approval by related authorities, etc. andchange its trade name to Custody Bank of Japan, Ltd.
: Disposal of Treasury Stock is conditional on the notification coming
into effect as per the Financial Instruments and Exchange Act.

2. Purpose of and Reason for the Disposal
ES-CON JAPAN announced “Notice on Continuation and Partial Revision of Performance-Based Stock
Reward System” on January 30, 2020, and “(Revised) Partial Amendment to the “Notice on Continuation
and Partial Revision of Performance-Based Stock Reward System”” on March 13, 2020, (the “System”;
the trust agreement on the System concluded with Resona Bank, Limited shall be referred to as the“Trust Agreement”; the trust to be established in regard to the Trust Agreement shall be referred to as the“Trust”), and later, such was approved at the 25th Regular General Meeting of Shareholders held on
March 26, 2020.
The Disposal of Treasury Shares is to dispose treasury shares through third-party allotment, with Japan
Trustee Services Bank, Ltd. (trust account), the trustee entrusted by Resona Bank, Limited, which is thetrustee of the Trust, as the allottee, in order to continue the Trust.
The number of shares to be disposed is equivalent to the total number of shares expected to be granted
calculated based on (a) the number of assigned shares pursuant to stock ownership regulations and (b)the number of expected recipients. The number is 0.46% of the total number of shares issued andoutstanding as of March 31, 2020 (The figure is rounded to the second decimal place. It is 0.48% of thetotal number of voting rights as of March 31, 2020, which stands at 691,607.) Since the granting of sharespursuant to stock ownership regulations takes place in line with retirement of directors and such and thus
in a gradual manner, it is not possible that a large number of shares will flow out to the stock market dueto the Disposal of Treasury Shares.
Furthermore, ES-CON JAPAN believes that the Disposal of Treasury Shares will lead to the improvementof its business performance over the medium to long term and increase corporate value through-1-

clarification of the link between remuneration of directors and ES-CON JAPAN’s performance and stock
price, and that the scale of dilution is reasonable and has a minimum impact on the trading market.
*Overview of the Trust Agreement(1)
Name(2)
Entrusting party(3)
Trustee(4)

Beneficiaries

(5)
(6)

Trust administrator
Date of conclusion of theTrust Agreement(7)

Trust term

: Board benefit trust for executives: ES-CON JAPAN: Resona Bank, Limited(Trustee: Japan Trustee Services Bank, Ltd.): Directors (excluding outside directors, auditors and nonexecutive directors) who fulfill the prescribed requirements: Third party having no interest in ES-CON JAPAN: April 1, 2015
: From April 1, 2015, to the closing of the Trust (as long as theTrust continues, with no specific closing date set)

3. Basis for Calculating Disposal Value and Specific Details
The disposal value was decided to be 628 yen, which is the closing price for ES-CON JAPAN’s shares on
the Tokyo Stock Exchange on April 27, 2020, which is the business day immediately prior to the date of
the resolution on the disposal by the board of directors (the “Resolution Date”), in order to eliminate
arbitrariness.
The said value deviates from the average closing price of 597 yen (rounded down to the nearest wholenumber) over the one-month period (March 28, 2020 to April 27, 2020) immediately preceding thebusiness day (April 27, 2020) immediately prior to the Resolution Date by 5.19%; deviates from theaverage closing price of 707 yen (rounded down to the nearest whole number) over the three-monthperiod (January 28, 2020 to April 27, 2020) by 11.17%; and deviates from the average closing price of827 yen (rounded down to the nearest whole number) over the six-month period (October 28, 2019 toApril 27, 2020) by 24.06%. (The deviation rates are rounded to the second decimal place.)
Taking into consideration the above, the disposal value for the Disposal of Treasury Shares is considered
to be rational as the value is not particularly advantageous to the allottee.
Furthermore, the audit committee (comprised of three members, three of which are outside directors) has
expressed an opinion that the above disposal value is not particularly advantageous to the allottee.
4. Matters Concerning Procedures for Corporate Code of Conduct
Since the Disposal of Treasury Shares (1) will have a dilutive effect of less than 25% and (2) does notaccompany a change in controlling shareholders, it does not require procedures set forth in Article 432 of
the securities listing regulations by the Tokyo Stock Exchange requiring an independent third-party
opinion and confirmation of shareholder intent.

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